November 21st, 2024
New Zealand food prices experienced a 12.1% year-on-year (YoY) increase in March 2023 compared to March 2022, according to the latest data released by Stats NZ on Monday. The largest contributor to this increase was the grocery food category.
In March 2023, grocery food prices rose by 14%, driven primarily by higher prices for barn or cage-raised eggs, potato chips, and six-pack yoghurt, said James Mitchell, consumer prices manager at Stats NZ.
All broad food categories measured by Stats NZ showed significant increases in comparison to March 2022:
Fruit and vegetables: 22% increase
Restaurant meals and ready-to-eat food: 8.7% increase
Meat, poultry, and fish: 7.8% increase
Non-alcoholic beverages: 8.2% increase
The second-largest contributor to the annual movement was the fruit and vegetables category, with tomatoes, potatoes, and avocados driving the increase.
On a monthly basis, food prices rose 0.8% in March 2023 compared to February 2023. When adjusted for seasonal effects, the monthly increase stood at 0.5%. The most significant contributor to the monthly movement was the 2.3% increase in grocery food, with barn or cage-raised eggs, six-pack yoghurt, and boxed chocolates having the most substantial impact.
However, these price rises were partially offset by a 1.0% decrease in meat, poultry, and fish prices during the same period.
The surge in food prices puts additional pressure on consumers, particularly those on fixed incomes or facing financial challenges. As the cost of living continues to rise, New Zealanders may need to adjust their spending habits or seek alternative options to cope with the increased expenses.
Historical overview of Food Price Index
The food price index is an important economic indicator that tracks the changes in the cost of a representative basket of food items over time. The data provided in the table represents the New Zealand food price index annual percentage change for each month from January 1989 to March 2023. This analysis will explore the trends, fluctuations, and key events that shaped the food price index in New Zealand over the years.
Key trends and fluctuations
The 1989-1990 spike: In the late 1980s, the New Zealand food price index experienced a notable increase, with the highest peak in August 1989 at 8.5%. This increase can be attributed to several factors, such as inflation, changes in exchange rates, and global events that impacted food supply chains.
The Mid-1990s stability: Between 1993 and 1998, the food price index in New Zealand remained relatively stable, with the annual percentage change fluctuating between 1.2% and 2.8%. This period of stability could be attributed to consistent economic growth, stable inflation rates, and a favorable global food market.
The Early 2000s volatility: The period between 2000 and 2009 saw increased volatility in the food price index. The highest annual percentage change during this time was in July 2008 at 10.4%, likely driven by the global financial crisis and resulting economic downturn, as well as rising fuel costs and adverse weather conditions affecting agricultural production.
The Post-2010 recovery and fluctuations: From 2010 to 2023, the food price index demonstrated an overall recovery from the financial crisis. However, there were still notable fluctuations, such as the dip to 0.6% in September 2014, possibly due to lower global commodity prices and improved domestic agricultural productivity. The more recent increase to 6.8% in March 2023 could be attributed to supply chain disruptions, inflationary pressures, and increased global demand for food.
Seasonal variability
The data also reveals a pattern of seasonal variability in the food price index annual percentage change. For example, there are often increases in the index in the months of January and February, which could be attributed to the high demand for fresh produce during the summer months in New Zealand. Conversely, there are generally lower index values during the winter months, such as June and July, possibly due to decreased demand for fresh produce and increased availability of preserved and imported food items.